Honolulu raises short-term rental registration fees

Short-term rental (STR) owners may have to pay more for registration in some cases under a new law passed by the Honolulu City Council.

Bill 62 reinstates several STR rules that were included in a previous ordinance but were inadvertently omitted in a 2024 amendment to county land use regulations. Among the changes is an increase in the fee for registering an STR with the Honolulu government from $500 to $1,000. The law also requires a new initial registration when there are changes to an STR’s owners or operators. The fee for initial registration is $1,000, while the fee for a renewal with continuing owners is $500.

Honolulu passed a strict STR ordinance in April 2022 that banned rentals of between 30 and 89 days in nonresort areas. Under previous laws, STRs were defined as rentals of at least 30 days. However, in January 2024, a federal judge ruled that existing Honolulu STRs could continue operations, but that the ban on rentals of 30 to 89 days would apply to STRs established after the law was passed. The ordinance only allows STRs in resort-zoned areas, including Waikiki and Ko Olina. Violations can result in fines of up to $10,000 per day. Earlier this year, the City Council ruled to foreclose on a vacation rental property whose owner owed nearly $1 million in fines for operating an illegal STR.

Last year, Honolulu raised property taxes on STRs. Under the changes, STR owners who don’t live in their properties are charged $9 per $1,000 of value up to $800,000 and $11.50 for anything above that. The previous rate was $4 per $1,000 of assessed value up to $1 million. Hotels pay $13.90 per $1,000 of assessed value.

For tax purposes, STRs in Hawaii are defined as stays of less than 180 consecutive days. Income from STR operations is subject to state general excise tax (GET) and state transient accommodations tax (TAT). The state GET rate is 4%, while the state TAT rate will rise from 10.25% to 11% starting January 1, 2026, with the extra revenues dedicated to an environmental fund. Honolulu STR proceeds are also subject to county GET and TAT surcharges. STR business owners may pass GET and TAT on to their guests.

Hawaii STR operators are required to register with the Hawaii Department of Taxation for GET and TAT licenses or tax ID numbers. For state-administered TAT and GET, as well as county GET surcharge taxes, operators must file lodging tax returns with the state and pay at the time of filing. For county TAT surcharge taxes, hosts file returns with the state, but pay the taxes to county tax authorities.

While STR marketplaces such as Airbnb and Vrbo collect taxes on behalf of their hosts in many states, they’re not allowed to do so in Hawaii. Operators are responsible for collecting and remitting them to state and local tax authorities.

Avalara MyLodgeTax can help vacation rental hosts automate and simplify lodging tax compliance on the local and state level, including tax registration and filing. For more on vacation rental lodging taxes in Hawaii, see our state vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.